Information: For better illustrations, non-profitable users are classified as Consumers while profitable firms as Customers. Question 1:
Discuss competition in the search industry. Which of the five competitive forces seem strongest and weakest? What is your assessment of overall industry attractiveness? To remain leading, it is critical to analyse competitive-level by understanding competitors’ strengths and weaknesses so as to buff up own defences and plan for strategic responds against changes (Bergena & Peteraf, 2002). In view of search engine, a categorized-list of competitive companies is shown in Figure 1.
Figure 1. – Competition in Search Engine
Using Porter’s Five Forces, an analysis of the industry’s attractiveness and competition are illustrated in Figure 2 (Porter, 1998).
Figure 2. – Michael E. Porter Industrial Analysis
Figure 2 depicts Intensity of Rivalry as the strongest force in the industries. Having only small and fixed amount of competitors in the industry, this causes intense competition due from close-imitations on any first-mover service-strategy (Benzinga, 2014). In addition, with no consumer switching cost between competitors, it impels company to constantly innovate and diversify so as to reach out to more consumers. It also depicts Threat of Substitutes as the weakest force. Presently, there are extreme-low or no direct substitutes for the capability of organizing information like the internet. However, the existence of online and offline materials such as E-library, E-books, newspaper, Library and Encyclopedia may considered as possible substitutes. Nevertheless, these materials do come with the cost of monetary and time values when one purchases any encyclopedias or visits the library. Hence, with internet being total cost-free, they are hardly comparable and substitutable to the search engines. Overall, the attractiveness of the industry remains low as the market is already well-defined with strong rivalry within. This industry characteristically, is classified by McLoughlin & Aaker (2010) as the ‘Red Oceans.’ However, it is also critical to note that the internet is limitless. Viney, D. (2007) highlighted that; during the establishment of Google in 1996, Yahoo!, Altavista and Excite were the leaders but today Google has outrun them completely.
How is the search industry changing? What forces seems most likely to bring about major change to the industry within the next three to five years?
Today, we are easily accessed to search engine through computers, mobile devices and tablets. There is an obvious trend in the raise of the mobile search cum advertising, evidently depicts the relation between mobile devices with search industry; an indispensable mutual-supplementary (Curwen & Whalley, 2010). This form of relationship coupled with the influence of social-networking; have drastically evolved today’s search industry. Mergers and acquisition among technological-leading companies may thus, take place in coming years to create such integration that provides a one-stop-solution to all consumers.
The introduction of Cloud-Computing technology has impacted software market by a large extend (Jansa, 2013); transforming the way how consumers are customizing in terms of data storage. Although this platform is presently not at its optimal-form and still requires improvements, integrating this capability into search systems can be observed in the coming years to further value add to consumers.
Liu (2004) stated that the development of internet has encourages consumers evolve rapidly. The intense usage of search engines no longer desire for quantitative searches but commanded for qualitative searches; reducing time wastage on irrelevant information during searches. Furthermore, privacy coupled with security has always been a controversy (Solove, 2007). This influenced search companies to take serious approaches to their system. All...
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